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A Deloitte study finds grocery executives underestimating the premium consumers are willing to pay for fresh food and the importance they place on fresh food’s nutritional benefits.
The survey of 2,000 U.S. consumers in July found that price continues to be the main consideration for fresh food purchases, cited by 93%. That was followed by personal health and wellness (86%) and convenience (84%).
On health benefits, 91% believe a wholesome diet includes fresh food. Of the respondents, 83% think fresh food minimizes the risk of chronic health conditions and disease, and the same number believe it contributes to weight loss.
Despite their price concerns amid inflationary pressures, 68% of consumers said they are willing to pay a premium for the “best fresh food,” up 7 percentage points year over year and similar to 2021 levels. On average, these consumers are willing to pay 28% more for fresh food than frozen, canned, or processed alternatives. If the fresh food they’re purchasing is also considered sustainable, the average premium lifts to 30%.
An accompanying survey of 100 U.S.-based executives from larger grocers (with over 10,000 employees) found skepticism. Of the retail respondents, only 19% believe consumers would pay more for sustainable fresh food at an implied average premium of just 12%.
With price rising as a key priority, grocery retailers were also found to be overestimating the importance of other purchase drivers of fresh food.
For instance, 47% of consumers agreed organic was either “important” or “very important” in the context of fresh purchases, while 94% of grocers felt the same about their typical customer. Among other purchase drivers, the responses measuring their importance were: locally grown/sourced, consumers 60% and grocers 93%; non-GMO, consumers 54% and grocers 85%; and environmental sustainability, consumers 63% and grocers 90%.
Also, 64% of the surveyed consumers believe fresh food can act like medicine, while only 40% of the executives think consumers would hold that belief.
"As price continues to be at the top of everyone's grocery list, the health and wellness benefits of fresh food are clear,” said Daniel Edsall, global grocer leader and principal at Deloitte, in a statement. “However, the industry may be overestimating the importance of other purchase drivers. Understanding consumer behavior and preferences when it comes to organic, locally grown and sustainably sourced fresh food can help grocers differentiate themselves from the competition, not just on price, but as a trusted source of information."
Packer’s Fresh Trends 2023 consumer survey found that if price “was not an issue,” 50% of consumers would buy organic produce (31% typically buy it) and 54% would buy locally grown produce (36% typically buy it).
When asked, “How does your desire for healthy options weigh in against your food budget?” Packer’s survey found:
- 21% said, “I buy whatever is healthy regardless of the price.”
- 31% said, “I prefer to buy what is healthy and do so when I can get a good deal.”
- 16% said, “I prefer to buy what is healthy, but it's too expensive so I do so rarely.”
- 32% said, “I buy only what I can afford.”